Bull Market History: Embrace The Most Hated Bull Market History

Bull Market History: Embrace The Most Hated Bull Market History

Bull Market History: Never Fear Stock Market Crashes

Hope is for fools that have plenty of time on their hands with an inordinate desire for pain, at least as far as investing in the markets go. We do not mean to be harsh, but the stock market is a jungle, only those that adapt live, the rest are cannon fodder.  The first thing you need to understand that investing does not come down to fundamental analysis, technical analysis, tea leaf analysis, listen to the puppet masters on CNBC, etc. it comes down to the control of your emotions.

In theory, this is easy but in practice; it is a whole new ball game, and hence the saying practice makes perfect. We are not talking about being a robot; we are talking about acknowledging the emotion but not giving in to it. Even the most successful investor is nervous when it comes to buying stocks after a market has pulled back sharply. When the masses are in panic mode, and you are nervous to buy, it is a good time to make long-term purchases. The focus should be on the long term and not on short term gains. More time should be dedicated to understanding the emotions of fear and hope as these are the two most important emotions as this is the common denominator amongst those who consistently lose in the stock markets.

Almost nine years later and this hated Stock Market Bull is hardly getting any love and,  and people wonder why it keeps soaring higher and higher.  Two answers explain this phenomenon:

Bull Market History: This Bull Market is Being Fuelled By Hot Money

Central bankers led by our Fed have decided to turn things around and support this initially via quantitative easing and then by maintaining an ultra-low rate environment.  As the economy has not improved and businesses are aware of this, the easiest way to grow EPS is via massive share buybacks. Reduce the number of outstanding shares and you increase the earnings per share.  Corporations have thus picked up where the Fed has left off.  Share buybacks have soared through the roof since 2010; current levels stand at $1 trillion.

This more than the GDP of many nations but in the US corporations are allowed to borrow vast sums buy back their shares, create the impression that earnings are improving and in doing so, drive stock prices higher. They can then use the increase in stock value to borrow even larger sums creating a vicious cycle that will only end with default.  There is also no way of knowing if the Fed is still not directly intervening and supporting this market as their books are not audited. Nothing is preventing the Fed from creating an extra trillion dollars and using it to prop the markets.

How would anyone be the wiser since no outside party is allowed to examine their books? The fox is in charge of the hen house; one can’t ask for a better scam. Thus the amount of hot money hitting this market is expected to soar to even more insane levels, and this market is going to be driven to super bubble territory before it collapses. Hence,  this Hated Stock Market Bull is expected to trend a lot higher before it drops dead from exhaustion.

Emotions will keep driving hated Stock Market Bull higher 

The two graphs below clearly reveal that the masses have refused to embrace this market and the longer they stay on the sidelines, the higher this market will soar.  History is rife with such example; when the crowd is euphoric, a top is close at hand and vice versa. Focus on the trend and not the noise; an empty can makes the most noise.

Emotions will keep driving hated Stock Market Bull higher

Both charts are slightly delayed in order to protect our paying subscribers; as you can see the crowd is still nervous and so all strong pullbacks have to be viewed as buying opportunities.

Bull Market History

Bull Market History: Tactical Investor Aug 2019 Update

Looking at the chart below, it would be easy to conclude that we are about to push the “triple top” theory, but we are not.  We are looking at the picture in terms of very strong resistance and very strong support zones.  The Dow has tried to trade above 26,800-27,000 ranges almost 19 months. Furthermore, these attacks have been widely spaced out.  Hence, the Dow is now at an inflexion point”; it either blasts above 27,000 and in doing so former resistance turns into strong support.

Forget the Stock Market Crash Date Argument; Focus on the Trend Instead

Alternatively, if it fails to hold above 27K (after trading above it) the pullback could range from medium to strong. A medium pullback would end in the 25,500-25,800 ranges. A strong pullback could take the Dow all the way down to 24,5K (plus or minus 200 points).

This outlook is based on the short to intermediate timelines; the long term picture is still bullish. We are not worried about a sharp or medium pullback for the only thing that changes is the opportunity factor. When the trend is up, strong deviations are viewed through a very bullish lens; in other words, the strong the deviation, the better the opportunity factor.   If the above comes to pass, it will be a good time to test your resolve for it is easy to buy when the situation appears to be calm, but when it’s not most panic and run instead of embracing the opportunity. It’s amazing how when a market is soaring everyone wants to get in and pay more and more, but the same individuals that were willing to pay more are now afraid to pay less for the same stock.   End of Market Update, July 11, 2019, Stock Market Crash Date: If Only The Experts Knew When


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